Jan. 7, 2012- PSEI to New Highs

We’ve definitely come a long long way these past 3 years.

From the depths of 1745 last March 17, 2009.  We’re now set to test our all time high of 4,563 set last August 2, 2011.  We last closed at 4476, just a 2.5% day will already be enough for us to make the headline banners come rushing with congratulatory applauses from all the stock market traders and investors.

What makes this “New High” glories more important for me, is that we( the Philippines) are one of the strongest out performers in the entire Asian region.  A quick glance on the charts will show how much of a rose among the thorns Philippines, Indonesia and Malaysia have become compared to the likes of China, India and Hong Kong.

Brushing all my bullishness aside, I made a table below just to show the biggest movers in our index, as well as the earnings estimates for 2012 in order to participate in a broad-based advance in the markets.  The study is meant to show that if I’m a “beta” player, where I want to generate returns mostly in just following index-constituent plays, I’ll focus solely on the highest weightings in the market, and hold them, as the short term and medium term picture for the index is particularly favoring the bulls.

I highlight below the market cap weighting of our PSEI index constituents.  This means, that if I were a fund manager whose exposure and performance is intrinsically related relative to the way the index performs, I’ll naturally want to push/pull the ones that have the highest impact in the indices in my portfolio holdings, as these can influence the PSEI more.

As of Friday, Jan 6, 2012.  This is how the weightings look like.  Ceteris paribus on the way the charts of the following stocks look, TEL,SM,MER,SMC,AP,AEV,ALI,BPI,AC,SMPH,JGS,BDO,MBT,GLO comprise 72.7% of the entire index.  Thus, it would be prudent and wise to have these charts (who are either on the verge of breaking out of new resistances to be bought more, or if broken be bought on any pullbacks as there’s huge incentives of at least a theory of just following the index leader.)  I honestly think this is the reason why all the laggards have joined the party.  (ALI,AP,AEV,JGS,MER were all laggards in the market but have recently been bought in the same manner just so its not being left out with the party.)

Of course, the more important thing to note is that, other than simply following the index, if there’s a fundamental reason other than the beauty of these charts to be bought (in the case of TEL,GLO,DGTL’s,MWC’s super outperformance.)  Okay, maybe that’s just an observation.  I’ll follow up this post with a review of the strong performers in our market (notwithstanding the speculative mining issues that have been whopping with short term profits.  Jockeying galore for most penny stock players.)

-Faceless Trader

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One Response to Jan. 7, 2012- PSEI to New Highs

  1. Apologies, for the earnings estimates of the following index constituents. Kindly just view the fundamental investment guides that are mostly available in most local securities firms. I’ll try to update the earnings estimates for 2012 in the next post. I just have to go run for now. See ya 😀 – FT.

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